The recent UK Budget turned out to be pretty neutral and given the issues that Chancellor Philip Hammond had to juggle with, I suppose we could describe it as a reasonable outcome.
One good result was that there were plenty of promises to improve the UK infrastructure network. So much so, that there is concern over how we may replace the European Investment Bank as a source of future funding. But do we believe that government will get behind this infrastructure spend and actually deliver on these promises? Déjà vu springs to mind!
But seriously, we have highlighted in this column before the golden opportunity that currently exists to deliver infrastructure competitively and cheaply. Let’s hope that this happens and helps to create some much needed growth.
Staying with the UK, the economic outlook is still very gloomy. The Office for Budget Responsibility slashed its forecast for productivity from 1.6% to 0% this year and has revised down future estimates for the next five years. This sort of decline inevitably has a knock-on effect to growth, so not a very constructive forecast. But how reliable are these forecasts?
Given recent employment and manufacturing figures you could be forgiven if you felt this frankly disastrous prediction was rather pessimistic. In addition, the level of economic uncertainty in general is heightened by the ongoing undetermined details of the UK's Brexit deal. This in itself is more than a year away and no-one knows how this will influence the UK in the future.
It is no surprise that businesses may be reluctant to invest in the future until they know what the future may look like! This would certainly influence productivity. Whether this forecast is right or wrong, it seems a safe bet to blame the uncertainty on Brexit.
The EU on the other hand has performed well. Economic growth in the eurozone is up again with Q2 and Q3 growth up 0.7% and 0.6% respectively. The eurozone seems to be experiencing a significant recovery after years of financial crisis, while the UK has been hit by increasing inflation due to, among other things, a weak sterling following the Brexit vote.
For the first time in 10 years, the Eurozone is on track to grow at the fastest rate since the financial crisis, with an estimated GDP forecast of 2.2%. Coupled with the lowest unemployment rate since 2009, it appears that the eurozone is finally on the road to recovery.